LNG Bunker Snapshot: Singapore bunker premium surges as Europe’s narrows
Singapore-ARA spread more than doubles to $174/mt
ARA and Baltic bunker premiums narrow and TTF falls
Low EU storage and Hormuz tensions limit further downside
Weekly changes in LNG bunker prices:
- ARA down by $62/mt to $944/mt
- Singapore up by $36/mt to $1,118/mt
- Baltics down by $62/mt to $1,051/mt
- Portugal down by $46/mt to $1,059/mt
Europe
European LNG bunker prices tracked lower with the front-month TTF contract, which fell $0.87/MMBtu ($45/mt). Peace talk optimism around US-Iran negotiations raised hopes of a reopening of the Strait of Hormuz, while cooler temperatures across Europe reduced gas-fired power demand.
LNG bunker prices in the ARA and the Baltics underperformed against TTF, each dropping $62/mt as bunker delivery premiums also narrowed on the week. Portugal fell $46/mt, though its pricing remains only loosely tied to TTF.
Downside was limited by renewed skirmishes near Hormuz over the weekend and persistently low EU gas storage - around 35% full versus a five-year average of 47%.
The IEA’sGreg Molnar said storage injections remain 20% below last year's pace, reflecting tight supply conditions, and warned the injection campaign will be "more challenging and more expensive than expected."
On the supply side, new LNG exports led by the US have offset around two-thirds of the Hormuz disruption, according to Molnar.
“However, the gains in LNG prices were offset by reports that Qatar is managing to get some LNG cargo through the Strait of Hormuz,” ANZ Bank commodity strategist Daniel Hynes said.
Unplanned maintenance at several Norwegian gas facilities added a further supply concern, though the impact on prices was muted, the Japan Organization for Metals and Energy Security (JOGMEC) noted.
Asia
Singapore's LNG bunker price moved in the opposite direction to European ports, rising despite a broadly flat front-month JKM contract.
The increase was driven entirely by a widening delivery premium - now $4.62/MMBtu ($240/mt) versus $3.93/MMBtu ($204/mt) last week - after two high price quotes from physical suppliers pushed the benchmark up.
The Singapore-ARA spread has widened from $76/mt to $174/mt in the past week, reflecting the divergence between softening European benchmarks and steeper Singaporean bunker delivery premiums.
JOGMEC reported significant JKM volatility during the week, with $/MMBtu spot prices swinging from the low-$18s to the high-$16s as sentiment shifted between peace talk progress and fresh Hormuz tensions.
A nuclear reactor outage in Japan provided additional support for regional LNG demand.
Meanwhile, the IEA’s Molnar noted that China's LNG imports have plummeted 25% year-on-year since the start of the conflict, with volumes being resold into other Asian markets and gas-to-coal switching helping to balance its internal market.
Other LNG bunker news, LNG continued to dominate alternative fuel-capable vessel orders in April, according to DNV data. These orders spanned several segments, including car carriers (8), container vessels (6), crude tankers (4) and cruise ships (2).
There are now 933 LNG-capable vessels in operation and another 681 on order for delivery by 2033.
By Erik Hoffmann
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